Is Pet Health Insurance Worth the Price?

We Take Out Policies
On 2 Cats and 2 Dogs;
Funds for Oscar's Fleas

By

Suzanne Barlyn

Updated March 13, 2008 12:01 am ET

Pet insurance was one expense we thought we could do without -- despite 14 years of cohabiting with furry critters. But we nearly kicked ourselves for not buying a policy sooner when one dog faced possible orthopedic surgery that would set us back $2,500.

Pet Insurers

Animal lovers have good reason for concern about their veterinary bills. Americans spent $10.1 billion in veterinary care last year, up 40% from $7.2 billion in 2002, according to the American Pet Products Manufacturers Association (APPMA), a Greenwich, Conn.-based trade organization. The increase "is a reflection of more services now being available to pet owners and more people being willing to take advantage of those services," says APPMA President Bob Vetere. Procedures such as hip replacement and cataract surgery for pets, for example, were practically unheard of a decade ago, he says.

Pet insurance, which covers veterinary care, may help offset the expenses -- and its popularity is on the rise. There are currently two million pet-insurance subscribers in the U.S. -- about 3% of pet owners -- but APPMA expects that figure to rise to between 5% and 7% of pet owners by 2010.

To test whether pet insurance is worth the premiums, we insured four pets -- two cats and two dogs -- through four national pet insurance plans.

Buying pet insurance, we learned, is a crapshoot -- just like any other policy. The occasional benefits checks we received seemed to take the edge off veterinary expenses. But we soon realized that our premiums could ultimately cost more than veterinary care over our pets' lives. For example, one of our policies would cost about $4,200 over 10 years. Pre-existing conditions are generally excluded in policies. So insuring our pets in their infancy, before those ailments developed, could have helped offset bigger bills as our pets grew. We'd consider buying a policy for breeds prone to specific health problems -- such as pugs, who often suffer eye conditions.

Filing claims is similar to the paperwork for our human health insurance. All but one insurer, VPI Pet Insurance, required a vet's signature on our claim forms -- a hassle, we thought. But insurers say it's necessary for proper documentation of procedures and diagnoses. Our policies tended to have deductibles between $50 and $125 and covered 80% to 90% of the insurer's allowable fees for veterinary care.

Our semiannual premium came to $191.40, plus a $10.50 issuance fee. But about a week after she was enrolled, she was in a veterinary emergency room, suffering respiratory distress. X-rays suggested cancer. Eight days later -- after repeated crises and hospital visits -- we stroked Kimba's struggling frame as the vet ended her suffering with lethal injections.

Three months later, we finally mustered the fortitude to print out forms from the insurer's Web site and mail in $3,056.50 in claims.

We were shocked to learn our claim was ineligible for reimbursement because Kimba's sickness manifested within a 30-day waiting period for illness coverage. The terms were laid out clearly in our policy, so we should have known. If we had not submitted any claims during the waiting period and had called to cancel our policy, we would have been entitled to a full refund of the $191.40 semiannual premium. The insurer is still reviewing our refund request.

Pablo, a 3-year-old pug, developed a skin condition and bladder stones two years earlier. We knew, from reading the VPI Pet Insurance Web site, that our policy wouldn't cover these pre-existing conditions. VPI requested Pablo's veterinary records and required an X-ray of Pablo's bladder -- even though his bladder condition wasn't covered. A VPI spokesman said the company required an X-ray because it wouldn't insure a pet with active bladder stones due to potential complications.

The company ultimately issued a policy for $31.25 per month, including wellness coverage. But we were still on the hook for Pablo's chronic skin condition -- which we stopped treating to reduce our expenses -- and $16 for each five-pound bag of prescription dog food for the bladder stones (special diets are generally excluded anyway). The reimbursement rate for a wellness visit was pretty low: We were billed $175 for the visit, which included vaccinations and a heartworm test, while the policy paid just $74.

We insured Oscar, a 3-year-old Persian cat, through the American Kennel Club Pet Healthcare Plan. Enrolling online was simple, and the insurer billed our $45 monthly premiums to our credit card.

Strangely, Oscar -- strictly an indoor cat -- suffered flea infestation twice during our test, and a flea allergy. He needed multiple remedies, including flea baths and antibiotics. Our vet bills totaled $453 for two separate visits. We resubmitted our claims after receiving a letter saying they were incomplete. (They weren't.) A few weeks later, we received three checks totaling $225.88, which reflected deductions for our $125 deductible and 20% co-pay.

Petshealth Care Plan partially reimbursed numerous claims for Pringle, a 2-year-old pug, which included expenses for an ear infection, neutering, a corneal ulcer, and a wellness visit. Our first treatment for his corneal ulcer cost $152, for which we received $106 in benefits. We consulted a veterinary ophthalmologist when the condition didn't improve, who stitched Pringle's inner eyelid closed so his cornea would heal. We filed an additional $375 in claims -- and received $263. His $75 routine dental cleaning wasn't covered, but the insurer picked up $140 of Pringle's $342 neutering bill (we later learned that Hartville Group, a Canton, Ohio-based pet health insurer, administered both the Petshealth Care Plan and ASPCA policy).

$453.35 for two flea infestations / The insurer reimbursed $225.88 in allowable expenses, after deductions for our $125 deductible and 20% co-insurance.

Two weeks after we filed our claim, the insurance company notified us that our claims were incomplete (they weren't) so we faxed them again. We received our payment about three weeks later -- a little more than a month after we submitted.

$3,056.50 for emergency cancer diagnosis, treatment and euthanasia / We didn't receive any reimbursement because Kimba's illness manifested within the first 30 days of purchasing coverage.

Obtaining a quote and applying for the policy via the company's Web site was easy. The 30-day exclusion was spelled out in our policy. Our $191.40 semiannual premium would have been refunded if we had not submitted any claims during the 30-day period.

Enrolling online was easy, but the insurer required copies of Pringle's medical records. The policy was a worthwhile expense for this particular dog. We wish it included some coverage for his routine dental cleaning. The company processed each claim within several weeks of submissions, and the explanation was easy to understand.

The insurer required copies of Pablo's medical records. We had to obtain an X-ray to rule out bladder stones. The policy excluded coverage for Pablo's most costly medical problems -- bladder stones and a skin condition -- as we expected. Canceling was easy via the insurer's Web site.

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